States that opt for the Medicaid expansion can strengthen overall behavioral health systems and individual programs such as prevention and community-based services, and especially programs for children and young adults with

behavioral health conditions

As states continue to weigh whether or not to go forward with the Medicaid expansion under the Affordable Care Act (ACA), a new report released Jan. 16 by the National Association of State Mental Health Program Directors (NASMHPD) finds that the expansion would mean improved health status for people with mental illness, reduced mortality for

If all 50 states choose to opt into the new Medicaid expansion in the ACA, states will see budget gains of over $300 billion between 2014 and 2023, the new report stated. Additionally, states could potentially see another $60 billion in gains due to other factors, as the federal government incurs nearly all new Medicaid expansion costs over the initial 10-year period of the healthcare law.

The ACA requires states by January 1, 2014, to extend Medicaid eligibility to all groups of people under age 65 with income up to 133 percent of the federal poverty level who are not otherwise eligible for Medicaid. The Supreme Court on June 28, 2012, upheld most of the provisions of the ACA and gave individual states the option of expanding

Medicaid by changing enrollment requirements.

The new report, “The Waterfall Effect: Transformative Impacts of Medicaid Expansion on States,” examines the benefits of Medicaid expansion and potential drawbacks or negative consequences. The report findings are based on a comprehensive meta-analysis of over 20 Medicaid expansion-related studies released over the last two years.

For states that elect the full expansion of eligibility, the federal government will pay 100 percent of all Medicaid expansion costs from 2014 through 2016, eventually settling in at 90 percent beginning in 2020 and remaining at that payment range. The federal government recently announced that these coverage and match rates would not be provided to states that choose to partially expand eligibility or elect to forgo expansion, according to the report.

Budget increases

“Specifically, as part of the overall state budget gains of $300 billion, states will see budget increases in the delivery of public behavioral health services of nearly $40 billion between 2014 and 2019,” Robert Glover, Ph.D., executive director of the NASMHPD, told MHW. “Between 2009 and 2013, the public behavioral healthcare systems have incurred nearly $5 billion in funding cuts.

With the federal government picking up nearly $40 billion in mental health service costs, it presents a golden opportunity to restore funding that has been cut to the state public behavioral health systems over the last 10 years.”

Glover noted that overall about 17 million people who are currently uninsured will obtain health insure coverage. “About 40 percent of this group - or 6.6 million individuals - with serious or moderate mental illnesses who are currently uninsured will obtain health insurance through the Medicaid expansion between 2014 and 2019,” he said.

“In addition to state budget increases, several studies released over the last few months show that the new Medicaid expansion effort will inject new federal Medicaid through a state’s economy, thereby improving employment, labor income and capital income, said Glover. “It could be a major job creator,” he said.

Downsides for nonparticipation

The report noted that several downsides exist for states that do not participate in the expansion, including the loss of tax benefits, a diminished opportunity for the state to improve its healthcare infrastructure, and reduced opportunities to address the needs of lower- and moderate-income populations with highcost chronic diseases.

“States that choose not to opt into the expansion will see their tax dollars go to other states that expand coverage,” said Glover. “Medicaid expansion reduces uncompensated care costs for healthcare providers.

Increased coverage will significantly reduce the need for state funding of uncompensated care costs.” “The question we have for state officials who have said they will not opt into the new Medicaid expansion effort is this: Do you realize that

you are standing in the way of the most important expansion of mental health coverage and services in U.S. history, at the same time your state will see budget and revenue gains due to the expansion?” Joel Miller, senior director of policy and healthcare reform at the NASMHPD and lead author of the report, told MHW.

Miller added, “We recognize that states are still struggling due to the recent recession. But we believe our report makes it clear that opting into the new expansion program makes dollars and sense.”

State plans

Recent news reports indicate that previous opponents of the Medicaid expansion have had a change of heart. Arizona Gov. Jan Brewer announced during her State of the State address on Jan. 14 that Arizona would be participating in the expansion. Republican governors Susana Martinez of New Mexico and Brian Sandoval of Nevada also announced

plans to expand Medicaid.

At press time, Gov. Brewer was expected to release details about the expansion in her proposed state budget. “It was very courageous of the governor to make this announcement,” Corey Nelson, acting deputy director of the Arizona Department of Behavioral Health Services, told MHW. “The Medicaid expansion would provide a safety net for thousands

of Arizonians who have mental health issues.”

“We’re very pleased with the recent Arizona decision to opt into the Medicaid expansion,” said Glover. “We hope that governors who are still on the fence or who publicly said they are not interested in participating in the expansion will

change their minds once they have reviewed all the information that has been released about the fiscal and healthcare benefits of the new Medicaid expansion.”

The newly covered people under the expansion will receive comprehensive behavioral health benefits, as well as a robust medical benefits package, Glover added. “The behavioral health benefits will be at parity, meaning those benefits

are on par with medical and surgical benefits (similar deductibles, copays, co-insurance and annual/lifetime benefits),” he said.

Accessing coverage

The report notes there are seven key cascading events that are critically important to assuring that uninsured people gain access to health coverage, and that ultimately achieve the goal of providing high-quality care to all individuals (see graph, above):

1. Access to health insurance coverage.

2. Ability to enroll in health insurance plans.

3. Access to covered services and providers.

4. Choice of health plans and providers.

5. Ability to build a new workforce and increase capacity.

6. Access to a consistent source of primary care.

7. Delivery of high-quality healthcare services.

The report urges state behavioral health agencies to make a strong business case to state and local officials at all levels - from cabinet members to county executives - that opting into the Medicaid expansion will not only save money for

states, but also save lives and improve the health status for millions of newly eligible people. This would especially benefit people with serious mental illness through better access to health insurance and effective quality improvement approaches.

“The expansion ensures that people with behavioral health conditions can access specialty and primary care services,” said Glover. “Health insurance coverage is the pass-key to the system.” •